A:

Sallie Mae (officially the SLM Corporation (SLM)) is the number one provider of financial aid and student loans in the United States, servicing over 25 million students. The privately held company and disburses funds to its students in a variety of ways.

To the School

Sallie Mae often disperses financial aid directly into a student's school account. The educational institution uses the funds to pay for tuition or other costs that build up over the loan approval waiting period; they normally have 14 days to apply the money to a student's account. If there are leftover funds, the student can have the school disburse those funds directly to him or save them for future costs.

Direct to Student

There are some colleges that have Sallie Mae disburse the funds directly to the student. If a school allows for direct disbursement, it can issue a check, send the funds as an electronic transfer, pay out the loan amount in cash or sign over the check directly to the student. Under these circumstances, both the student and the school are listed as the co-beneficiaries, meaning that both a school official and the student need to sign to have the funds released directly.

Who Qualifies?

Sallie Mae loans, which are private loans, are granted to applicants who have good credit. Most of the time, though, the loans are actually granted to the student's parents, instead of, or in addition to, the student. The parents are considered co-borrowers, and could be liable for repayments. This does not affect how the loan funds are disbursed, however.

RELATED FAQS
  1. Do Sallie Mae loans go directly to your school?

    Learn the types of financial aid and student loans Sallie Mae offers college students, including when funds are disbursed ... Read Answer >>
  2. Can Sallie Mae loans be forgiven?

    Understand the difference between private and public student loans. Learn if Sallie Mae loans can be forgiven and if other ... Read Answer >>
  3. Can student loans be used to pay rent?

    In most cases, loans can be used for housing costs, but students should still plan to have some cash on hand. Read Answer >>
Related Articles
  1. Personal Finance

    A Beginner's Guide to Getting Student Loans

    Follow these 5 steps and you'll be well on your way to knowing which loans to go after – and which college really offers you the best deal.
  2. Personal Finance

    Student Loan Asset-Backed Securities: Safe or Subprime?

    Similar to the mortgage-backed securities that caused the 2008 recession, student loan asset-backed securities could lead to the next financial crisis.
  3. Managing Wealth

    Student Loan Debt: Which States & Schools Cost Most/Least

    Student loan debt affects 43 million Americans. A new report from LendEDU breaks down the most significant borrower trends by state and school.
  4. Personal Finance

    50% of College Students Believe Their Loans Will Be Forgiven by the Federal Government

    Candidate Trump suggested reforms, but will student loans be forgiven by the federal government across-the-board?
  5. Personal Finance

    Beware of the True Cost of Private Student Loans

    Choosing the right student loan is key as the impact of debt can be substantial.
  6. Personal Finance

    Who Should Pay For College?

    With college costs continuing to escalate, the question of who pays for it is increasingly relevant.
  7. Personal Finance

    How to Fund a College Education

    College is expensive. Luckily, the government, many institutions and private lenders offer ways to help students pay for college.
  8. Personal Finance

    Is Student Loan Debt The Next Financial Crisis?

    The student loan system is in desperate need of reform, as more and more graduates struggle to find work and pay off their student loans.
  9. Retirement

    Student Loan Debt and Your Retirement Savings

    The burden of student loan debt can hinder the ability to save long term for retirement
RELATED TERMS
  1. Student Loan Interest Deduction

    A student loan interest deduction is a tax deduction for interest ...
  2. Student Visa

    A student visa is a special endorsement added to a passport that ...
  3. Award Letter

    Award letter is the documentation sent from a college or university ...
  4. Federal Supplemental Educational Opportunity Grant - FSEOG

    Federal Supplemental Educational Opportunity Grants (FSEOG) provide ...
  5. Good Student Discount

    Good Student Discount is an auto insurance policy discount available ...
  6. Pay As You Earn (PAYE)

    Pay As You Earn (PAYE) refers either to a system of income tax ...
Trading Center